Correlation Between SAFEROADS HLDGS and Clean Energy

Can any of the company-specific risk be diversified away by investing in both SAFEROADS HLDGS and Clean Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SAFEROADS HLDGS and Clean Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SAFEROADS HLDGS and Clean Energy Fuels, you can compare the effects of market volatilities on SAFEROADS HLDGS and Clean Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SAFEROADS HLDGS with a short position of Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFEROADS HLDGS and Clean Energy.

Diversification Opportunities for SAFEROADS HLDGS and Clean Energy

0.0

Correlation Coefficient

SAFEROADS HLDGS  Clean Energy

Pay attention - limited upside

The 3 months correlation between SAFEROADS and Clean is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SAFEROADS HLDGS and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels and SAFEROADS HLDGS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SAFEROADS HLDGS are associated (or correlated) with Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of SAFEROADS HLDGS i.e., SAFEROADS HLDGS and Clean Energy go up and down completely randomly.

Pair Corralation between SAFEROADS HLDGS and Clean Energy

If you would invest  255.00  in Clean Energy Fuels on October 26, 2024 and sell it today you would earn a total of  24.00  from holding Clean Energy Fuels or generate 9.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SAFEROADS HLDGS  vs.  Clean Energy Fuels

SAFEROADS HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAFEROADS HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SAFEROADS HLDGS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Clean Energy Fuels

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Energy Fuels are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Clean Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SAFEROADS HLDGS and Clean Energy

The main advantage of trading using opposite SAFEROADS HLDGS and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFEROADS HLDGS position performs unexpectedly, Clean Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Clean Energy will offset losses from the drop in Clean Energy's long position.

The idea behind SAFEROADS HLDGS and Clean Energy Fuels pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.